The growth of UK SMEs is being undermined by spiralling costs of doing business, suffocating red tape and bullying tactics from larger companies, according to a study by a business lobbying group.
The survey of 4,000 small and medium-sized enterprises (SMEs) by the Forum of Private Business (FPB) shows the extent of damage felt by small British businesses, with nearly half stating that their business partners are neither interested in fostering long-term relationships (47 per cent) nor open to negotiating payment terms (46 per cent).
Half of SMEs polled (51 per cent) have experienced significant problems with late payment and 46 per cent feel powerless to negotiate supplier terms. Some 70 per cent state that behavioural late payment is a problem.
The majority of SMEs polled (52 per cent) say that in the face of supply chain abuse from big businesses, they would be forced to broaden their client base to minimise any future disruption to their cash flow.
The poll also reveals a major crisis of trust in big business amongst British SMEs. Utilities companies (79 per cent) and banks (69 per cent) are singled out as the least likely to take responsibility for their actions by small and medium-sized business owners.
By contrast, the majority of SMEs (80 per cent) believe that the UK’s larger private family-owned firms are the most trustworthy enterprises.
The new research echoes a ComRes poll commissioned by the FPB in January 2015, which showed that over three quarters (78 per cent) of the British public agree that big businesses are more likely to prioritise profits over high ethical standards.
A further three quarters (74 per cent) of the 2,000 Britons polled believe that the majority of big businesses have no concern for small business owners in the UK.
FPB chief executive Phil Orford says that SMEs already unfairly disadvantaged by rising costs and red tape are held back from growing by bad business practices.
‘Our latest poll confirms that the supply chain is fit to burst with hurdles and roadblocks that discriminate against small firms.
‘Big business has all the aces, and it is time for affirmative action from the next government to crack down further on this ethical deficit that threatens to break the backbone of British business – small businesses.’
Westminster is starting to listen, according to Orford, with Chancellor George Osborne answering FPB members’ calls for punitive measures for those involved in abusive or excessive tax avoidance (76 per cent).
‘We welcome last week’s budget announcement to use taxation as a way to influence better business practice in the UK, to ensure that all businesses pay their fair dues. We want a system that does not unfairly target many of the small to medium-sized firms that form the backbone of the UK economy,’ adds Orford.
‘However, there is still a lot more that the government should do. The UK’s political parties should be judged at the Election on their commitment to put business ethics at the top of the political agenda.’